Pay off truck early?

Discussion in 'Ask An Owner Operator' started by Wild Murphy, Sep 4, 2015.

  1. Wild Murphy

    Wild Murphy HAPPY TRUCK DRIVER

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    Is it better to pay a truck off early say like in a year or is it better to continue payments for 3 years for tax purposes. Please explain your view... Thanks.
     
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  3. rollin coal

    rollin coal Road Train Member

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    Pay it off. Tax write offs are not revenue streams. More than likely the interest you save is more than you're saving from the write off. Always best to not be leveraged. No one can touch you then. No pressure. Life is good.
     
  4. T_Bone

    T_Bone Bobtail Member

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    Are there any early payment penalties?
     
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  5. Straight Stacks

    Straight Stacks Paper Cha$er

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    That is dependent upon lender and loan agreement. ASK before signing loan.
     
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  6. Freddy57

    Freddy57 Road Train Member

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    It's always better to have it paid off and put the payment into your maintenance and replacement fund. You have to pay a whole lot in interest to save a little on your taxes, it's not worth it.
     
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  7. Oaker

    Oaker Medium Load Member

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    If no payoff penalties... pay it off, for the reasons listed previously.
     
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  8. xsetra

    xsetra Road Train Member

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    Pay off loan. All loans. Interest paid is likely more than any taxes saved.
     
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  9. Jerry12

    Jerry12 Heavy Load Member

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    Its always cheaper to pay the taxable amount. Then buy a part only to use it as a deduction.

    Get rid of those monthly interest payments.

    Curious how much per month is your interest. I would like to translate that yearly interest amount into what a deduction will look like to give that figure: equality.
     
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  10. supersnackbar

    supersnackbar Road Train Member

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    The only part of a payment that is tax deductible is the interest. The depreciation in the value of the truck is a deduction, but you take that over a scheduled set of years, so you get it whether you're paying a payment or not. Example - you have $60k cash to buy a truck. You walk in plop down your money and drive away. At tax time, you deduct only a portion of the value of the truck. What you have saved, like earlier posts have said, is the 10 or 11% (or what ever the going rate finance companies charge now) in interest on a used truck.
     
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  11. turboguy

    turboguy Light Load Member

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    pay it off early if there is not a prepayment penalty and invest the money you saved from the payments into an investment of your liking
     
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